Analyst Brian Lee said, "While investor concerns around seasonality and margins were running high into the quarter, we believe Cree navigated well, as: (1) growth in LED lighting (+42% yoy) continues to show the adoption curve is in the early innings; (2) March quarter guidance implies a return to 30%+ gross margin in lighting after several disappointing quarters, plus flat to slightly up overall margins despite lower revenue and higher lighting mix; and (3) share in LED bulbs is high with sell-through at Home Depot doubling qoq."

"More importantly, we believe solid execution against a tricky backdrop to start 2014 positions Cree for a potentially break-out June, where a combination of seasonal strength in LED demand, a bounce-back in outdoor lighting, consumer bulb re-stock and likely Home Depot extension could create a slew of potential upside catalysts," he added.

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